Biotech Bets*

Folks I've been keen on buying ISIS for quite some time. I was a holder when they signed their big deal and I enjoyed a nice run only to sell as shortsellers appeared to take control of the stock and drive it down. I have been biding time in this $12 - $13 area waiting for entry this is cheap for ISIS. One way to feel better about your ideas is to check in with someone REALLY smart and in biotech that would be (if you can get a hold of him)- Jim McCamant. In the early 1980's Jim was #1 in the bio space and lathough sort of retired and his newsletter - Medical Tech Stock Letter- is being handled by his son now, John.

Well John interviewed his father recently and wasn't I glad to see that dad's number 1 pick was mine too- ISIS!.....

John turned to his father for his insights into the current state of the biotech market as well as some of his current favorite stocks in the sector.

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"In volatile times like the ones we have been experiencing over the last few months, it is increasingly critical to draw upon experience. If at all possible, and it usually is, it is very important to put things into historical perspective.

"We recently sat down with James McCamant. Though he has since transitioned to the position of editor-at-large, Jim is still heavily involved in the biotech sector, and without question, we sleep easier at night with the knowledge that we have the full capacity to draw upon Jim's wisdom and experience, at any time.

"Jim pointed to the the enormous detrimental impact that short-selling has had on the sector. Hedge funds have been actively and rampantly shorting individual biotechs stocks, using manipulation to scare individual investors with the hope of increasing the profits on their short sale.

"Since the hedge funds that are primarily responsible have very large amounts of capital they can live with the frequent large losses. This pattern has led to in some cases catastrophic haircuts in individual biotech stock prices.

"The point here is not to dwell on short-selling, per se. We mention it again because it has played a key role in creating what has become the interesting and unusual biotech investment opportunity that Jim sees.

"That is, there has never been a period before in the history of the biotech sector where we have had so many cheap stocks. In fact, we are in an extremely attractive situation right now in which several companies could rise 50% from their current valuations and still be at just the beginning stages of a more major upward move.

"The process of shifting investor sentiment is often a difficult one, and usually takes a lot longer than we think it will, or even should, for that matter. However, keep in mind that when sentiment does shift, and it will, investors will likely be underestimating the upside.

"As Jim strongly pointed out, the stock market is presenting an unusual opportunity. There are currently more biotech stocks selling at prices which are dramatically below any real estimate of fair value than at any other time in the history of the industry.

"Within this context, we also asked Jim him what he viewed as some of his favorite investments within the biotech space. Two of Jim's favorites are names which have already been on our buy list for some time.

"Isis Pharmaceuticals (NASDAQ: ISIS), in particular, is a company that we have recommended for several years. However, during that time, the company has made substantial fundamental progress, and yet their respective market cap does not come close to doing justice to this fact.

"This has been glaringly demonstrated most recently by the fact that ISIS' stock is now trading back below where it was before the company signed the monster partnership with Genzyme for the development of mipomersen-a potential blockbuster drug in the making.

"In addition, the company has received essentially no increase in valuation even though they have also been benefiting from the continued execution by their satellite partners and they have monetized their Ibis Therapeutics division through the deal with Abbott.

"What this all mean to Jim, and we are in full agreement, is that we have right now a golden opportunity to purchase ISIS' stock at highly inexpensive levels-an opportunity that has tremendous upside potential.

"The other one that ranks toward the top of Jim's list is GenVec (NASDAQ: GNVC). Owning this stock has been an excruciating task, but one well worth it in the long run, in Jim's view.

"Forget about the vaccines business, a real revenue contributor for the company which is getting virtually zero credit from The Street. At the end of the day, Jim believes that from these current stock price levels, the potential of TNFerade alone could lead to a move in GNVC's stock that surpasses 10 or even 20 times its current price.

"He is looking at the size of the different cancer markets within which it might ultimately be used, the eventual penetration of TNFerade in these markets, and the data which has been produced thus far.

"He believes the odds are very good, and we fully agree, that these data will hold up, and that GNVC will go on to deliver vast rewards to faithful shareholders who stick it out.

"As point of the stock has fallen on tougher times over the last several months. Yert, if you believe in a company's approach as Jim does (and we do) with GNVC, then the wait will be worth it, and these are exactly the times to be buying.

"From among our non-recommended companies, the one that stuck out the most to us was Ariad (NASDAQ: ARIA). This stock of this intriguing cancer company is now down over 50% from its highs from just last summer.

"The company's approximately $200 million market cap does not, in Jim's opinion, come close to representing the real value that lies within. He believes that they are a well-managed company.

"This is evidenced, specifically, through the deal that ARIA did last year with Merck to jointly develop, on a global basis, ARIA's novel mTOR inhibitor, deforolimus.

"As part of this deal, management made the smart move of keeping the rights to half of the profits from future U.S. sales. This oral drug candidate is currently being evaluated in a global Phase 3 trial in patients with metastatic soft-tissue and bone sarcomas.

"We wholeheartedly agree with Jim that the current environment is presenting an outstanding long-term growth opportunity. In addition, we are able to choose from a vast array of companies-from development stage to fully integrated biotech companies-that all should provide excellent long-tern return.....

>>>I will be looking to enter ISIS in this downdraft folks! and certainly keeping GNVC & ARIA on the watch list~ stoney

On GNVC I found this- I have no idea who these guys are..... they sound informed- $5pt
~stoney

Boenning & Scattergood

For the 4Q 2007, GenVec reported revenues of $3.65m and an operating
loss of ($0.06) per share, in line with expectations. However, this is
not an earnings story and 2008 could be a watershed year for GenVec's
adenovector platform. The company recently reached an agreement with
the FDA to alter the primary endpoint of its phase III pancreatic
cancer trial (PACT), whereby overall survival would replace 12-month
survival as the measure of efficacy (refer to our note from
01/03/2008). During the year-end conference call, the company
announced that 39 centers are currently enrolling patients (up from
33), and we estimate that patient accrual to the trial is up by 35%
per month. Based on previous data from GenVec, current enrollment
status, and pursuant to the agreement with the FDA, we project that a
second interim look is likely to happen during the fall of 2008. While
we do not expect the data from this to be supportive of an early trial
stoppage, we would be looking for continued superiority in median
survival over the standard-of-care with concomitant emergence of
statistical significance. Additionally, based on GenVec's current burn
rate, we anticipate the need for additional financing during 2H 2008,
which could be in the form of a licensing agreement, a procurement
contract from the US government for the FMD vaccine or by accessing
the capital markets. Given the multiple product opportunities and
numerous funded programs backed by solid clinical data, we believe the
stock offers an excellent risk reward profile, and we reiterate our 12-
month target of $5.00. Risks to achieving this target include clinical
trial failure, failure to gain regulatory approval, competitive risk,
and share volatility and dilution.

Key Points
-PACT could propel GNVC during 2H 2008.
-Expect early stage data from head & neck and long term data from
esophageal cancers.
-FMD program an undervalued asset.